Berkeley's Akerlof Wins Nobel Prize in Economics

George A. Akerlof, a professor in UC Berkeley's Department of Economics, won the 2001 Nobel Prize in economic sciences on October 10, 2001. It is the second consecutive year in which the Nobel Prize has gone to a UC Berkeley economist. Akerlof is married to Janet L. Yellen, the Eugene and Catherine M. Trefethen Professor at the Haas School.

"He has real flashes of insight into human problems, into what may explain social phenomena," Yellen said. "It's wonderful to work with him; he's so original." Akerlof and Yellen have worked together on numerous research projects including research that refuted prevailing wisdom about how the economy functions.

Akerlof is the author of a landmark study on the role of asymmetric information in the market for "lemon" used cars. His research broke with established economic theory in illustrating how markets malfunction when buyers and sellers - as seen in used car markets - operate under different information. The work has had far-reaching applications in such diverse areas as health insurance, financial markets, and employment contracts.

Akerlof shares the prize with economists A. Michael Spence of Stanford University and Joseph E. Stiglitz of Columbia University for their contributions to the analysis of markets with asymmetric information.

Akerlof, 61, is UC Berkeley's 18th Nobel Prize winner. He is the university's third professor in seven years to win the prize in economics, following economics professor Daniel McFadden (2001) and late Haas Professor John Harsanyi (1994).

Previous Story / Table of Contents / Next Story